exh4-1_stockplan.htm


     

    
      

      

    

     

     

    EXHIBIT
4.1

     

    EMPLOYEE STOCK
PURCHASE PLAN

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    ENERGY
COMPOSITES CORPORATION

    


    EMPLOYEE
STOCK PURCHASE PLAN

    


    


    


    As
Approved and Effective June 2, 2009


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    TABLE OF
CONTENTS

    


    
      	 
      	 
      	 
      	
              Page

            
	
              SECTION
      1.

            	
              PURPOSE
      OF THE PLAN

            	
              1

            
	 
      	 
      	 
      	 
      
	
              SECTION
      2.

            	
              ADMINISTRATION
      OF THE PLAN

            	
              1

            
	 
      	
              (a)

            	
              Authority

            	
              1

            
	 
      	
              (b)

            	
              Responsibilities

            	
              1

            
	 
      	 
      	 
      	 
      
	
              SECTION
      3.

            	
              ENROLLMENT
      AND PARTICIPATION

            	
              1

            
	 
      	
              (a)

            	
              Offering
      Periods

            	
              1

            
	 
      	
              (b)

            	
              Accumulation
      Periods

            	
              1

            
	 
      	
              (c)

            	
              Enrollment

            	
              1

            
	 
      	
              (d)

            	
              Duration
      of Participation

            	
              1

            
	 
      	
              (e)

            	
              Applicable
      Offering Period

            	
              1

            
	 
      	 
      	 
      	 
      
	
              SECTION
      4.

            	
              EMPLOYEE
      CONTRIBUTIONS

            	
              2

            
	 
      	
              (a)

            	
              Frequency
      of Payroll Deductions

            	
              2

            
	 
      	
              (b)

            	
              Amount
      of Payroll Deductions

            	
              2

            
	 
      	
              (c)

            	
              Changes
      in Payroll Deductions

            	
              2

            
	 
      	
              (d)

            	
              Tax
      Withholding

            	
              2

            
	 
      	 
      	 
      	 
      
	
              SECTION
      5.

            	
              WITHDRAWAL
      FROM THE PLAN

            	
              2

            
	 
      	
              (a)

            	
              Withdrawal

            	
              2

            
	 
      	
              (b)

            	
              Re-Enrollment
      After Withdrawal

            	
              2

            
	 
      	 
      	 
      	 
      
	
              SECTION
      6.

            	
              CHANGE
      IN EMPLOYMENT STATUS

            	
              2

            
	 
      	
              (a)

            	
              Termination
      of Employment

            	
              2

            
	 
      	
              (b)

            	
              Change
      in Employment Status

            	
              2

            
	 
      	
              (c)

            	
              Leave
      of Absence

            	
              2

            
	 
      	
              (d)

            	
              Death

            	
              2

            
	 
      	 
      	 
      	 
      
	
              SECTION
      7.

            	
              PLAN
      ACCOUNTS AND PURCHASE OF SHARES

            	
              3

            
	 
      	
              (a)

            	
              Plan
      Accounts

            	
              3

            
	 
      	
              (b)

            	
              Purchase
      Price

            	
              3

            
	 
      	
              (c)

            	
              Number
      of Shares Purchased

            	
              3

            
	 
      	
              (d)

            	
              Available
      Shares Insufficient

            	
              3

            
	 
      	
              (e)

            	
              Issuance
      of Stock

            	
              3

            
	 
      	
              (f)

            	
              Unused
      Cash Balances

            	
              3

            
	 
      	
              (g)

            	
              Stockholder
      Approval

            	
              3

            
	 
      	 
      	 
      	 
      
	
              SECTION
      8.

            	
              LIMITATIONS
      ON STOCK OWNERSHIP

            	
              3

            
	 
      	
              (a)

            	
              Five
      Percent Limit

            	
              3

            
	 
      	
              (b)

            	
              Dollar
      Limit

            	
              4

            
	 
      	 
      	 
      	 
      
	
              SECTION
      9.

            	
              RIGHTS
      NOT TRANSFERABLE

            	
              4

            
	 
      	 
      	 
      	 
      
	
              SECTION
      10.

            	
              NO
      RIGHTS AS AN EMPLOYEE

            	
              4

            
	 
      	 
      	 
      	 
      
	
              SECTION
      11.

            	
              NO
      RIGHTS AS A STOCKHOLDER

            	
              4

            
	 
      	 
      	 
      	 
      
	
              SECTION
      12.

            	
              SECURITIES
      LAW REQUIREMENTS

            	
              4

            
	 
      	 
      	 
      	 
      
	
              SECTION
      13.

            	
              STOCK
      OFFERED UNDER THE PLAN

            	
              5

            
	 
      	
              (a)

            	
              Authorized
      Shares

            	
              5

            
	 
      	
              (b)

            	
              Anti-Dilution
      Adjustments

            	
              5

            
	 
      	
              (c)

            	
              Reorganizations

            	
              5

            


       

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              SECTION
      14.

            	
              AMENDMENT,
      SUSPENSION OR TERMINATION

            	
              5

            
	 
      	
              (a)

            	
              Amendment

            	
              5

            
	 
      	
              (b)

            	
              Suspension
      or Termination

            	
              5

            
	 
      	 
      	 
      	 
      
	
              SECTION
      15.

            	
              REPORTS
      AND NOTICES

            	
              5

            
	 
      	
              (a)

            	
              Statements

            	
              5

            
	 
      	
              (b)

            	
              Notices

            	
              5

            
	 
      	 
      	 
      
	
              SECTION
      16.

            	
              TERM
      OF PLAN

            	
              5

            
	 
      	 
      	 
      	 
      
	
              SECTION
      17.

            	
              DEFINITIONS

            	
              5

            
	 
      	
              (a)

            	
              Act

            	
              5

            
	 
      	
              (b)

            	
              Accumulation
      Period

            	
              5

            
	 
      	
              (c)

            	
              Board

            	
              6

            
	 
      	
              (d)

            	
              Code

            	
              6

            
	 
      	
              (e)

            	
              Committee

            	
              6

            
	 
      	
              (f)

            	
              Company

            	
              6

            
	 
      	
              (g)

            	
              Compensation

            	
              6

            
	 
      	
              (h)

            	
              Corporate
      Reorganization

            	
              6

            
	 
      	
              (i)

            	
              Designated
      Agent Holding Period

            	
              6

            
	 
      	
              (j)

            	
              Eligible
      Employee

            	
              6

            
	 
      	
              (k)

            	
              Exchange
      Act

            	
              6

            
	 
      	
              (l)

            	
              Fair
      Market Value

            	
              6

            
	 
      	
              (m)

            	
              Offering
      Period

            	
              7

            
	 
      	
              (n)

            	
              Participant

            	
              7

            
	 
      	
              (o)

            	
              Participating
      Company

            	
              7

            
	 
      	
              (p)

            	
              Plan

            	
              7

            
	 
      	
              (q)

            	
              Plan
      Account

            	
              7

            
	 
      	
              (r)

            	
              Purchase
      Price

            	
              7

            
	 
      	
              (s)

            	
              Stock

            	
              7

            
	 
      	
              (t)

            	
              Subsidiary

            	
              7

            


    

    


     

     

     

     

     

    
ii 


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    ENERGY
COMPOSITES CORPORATION

    EMPLOYEE
STOCK PURCHASE PLAN

    


    SECTION
1.  PURPOSE OF THE PLAN.

    


    The
purpose of the Plan is to secure for the Company and its stockholders the
benefits of the incentive inherent in the ownership of Stock by current and
future Eligible Employees and to provide such Eligible Employees with an
opportunity to increase their proprietary interest in the success of the Company
by purchasing Stock from the Company on favorable terms and to pay for such
purchases through payroll deductions.  The Plan is intended to qualify
as an “employee stock purchase plan” under section 423 of the Code and
shall be administered, interpreted and construed in accordance with such
provisions.

    


    SECTION
2.  ADMINISTRATION OF THE PLAN.

    


    (a)  Authority.  The Plan
shall be administered by the Committee.

    


    (b)  Responsibilities.  The
Committee shall have full authority to construe, interpret and apply the terms
of the Plan, determine eligibility, make decisions relating to the operation of
the Plan and resolve any claims arising under the Plan.  The Committee
may adopt such rules, guidelines and forms as it deems necessary or appropriate
to implement and administer the Plan.  The Committee’s determinations
under the Plan shall be final and binding on all persons.  The Company
shall pay all costs of administration of the Plan.

    


    SECTION
3.  ENROLLMENT AND PARTICIPATION.

    


    (a)  Offering
Periods.  During the term of the Plan, two Offering Periods
shall commence in each calendar year.  The Offering Periods shall
consist of the six-month periods commencing on each January 1 and July
1.  Notwithstanding the foregoing, the first Offering Period under the
Plan will commence on the day on which a registration statement under the Act
with respect to Stock to be purchased hereunder shall be effective and end on
the earlier of the next June 30 or December 31 thereafter.

    


    (b)  Accumulation
Periods.  An Accumulation Period shall run concurrent with each
Offering Period.

    


    (c)  Enrollment.  Any
individual who, on the day preceding the first day of an Offering Period,
qualifies as an Eligible Employee may elect to become a Participant in the Plan
for such Offering Period by executing the enrollment form prescribed for this
purpose by the Committee.  The enrollment form shall be filed with the
Company at the designated location, or with the designated person, before the
start date of such Offering Period.

    


    (d)  Duration of
Participation.  Once enrolled in the Plan, a Participant shall
continue to participate in the Plan until he or she ceases to be an Eligible
Employee, withdraws from the Plan under Section 5(a) or reaches the end of
the Accumulation Period in which his or her employee contributions were
discontinued under Section 8(b).  A Participant who withdrew from
the Plan under Section 5(a) may again become a Participant, if he or she
then is an Eligible Employee, by following the procedure described in Subsection
(c) above.  A Participant whose employee contributions were
discontinued automatically under Section 8(b) shall automatically resume
participation at the beginning of the earliest Accumulation Period ending in the
next calendar year, if he or she then is an Eligible Employee.

    


    (e)  Applicable Offering
Period.  For purposes of calculating the Purchase Price under
Section 7(b), the applicable Offering Period shall be determined as
follows:

    


    (i)           Once
a Participant is enrolled in the Plan for an Offering Period, such Offering
Period shall continue to apply to him or her until the earliest of (A) the
end of such Offering Period, (B) the end of his or her participation under
Subsection (d) above or (C) re-enrollment for a subsequent Offering
Period under Paragraph (ii) below.

    


    (ii)           When
a Participant reaches the end of an Offering Period but his or her participation
is to continue, then such Participant shall automatically be re-enrolled for the
Offering Period that commences immediately 

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

      after the
end of the prior Offering Period.

    

    


    SECTION
4.  EMPLOYEE CONTRIBUTIONS.

    


    (a)  Frequency of Payroll
Deductions.  A Participant may purchase shares of Stock under
the Plan solely by means of payroll deductions.  Payroll deductions,
as designated by the Participant pursuant to Subsection (b) below, shall
occur on each payday during participation in the Plan.

    


    (b)  Amount of Payroll
Deductions.  An Eligible Employee shall designate on the
enrollment form the portion of his or her Compensation that he or she elects to
have withheld for the purchase of Stock, but not less than $10 for each pay
period.  The Committee may determine, in its sole discretion, to
establish a maximum dollar amount or percentage of Compensation Participants may
authorize for payroll deductions during any Accumulation Period or calendar
year.  Any such limit established by the Committee shall apply to all
Participants and meet the requirements of Section 423 of the Code.

    


    (c)  Changes in Payroll
Deductions.  If a Participant wishes to change the rate of
payroll deductions, he or she may do so by filing a new enrollment form with the
Company at the designated location, or with the designated person, at any
time.  The new payroll deduction rate shall be effective for the next
Offering Period.

    


    (d)  Tax
Withholding.  Payroll deductions under the Plan are subject to
income and employment tax withholding.  By executing an enrollment
form, each Participant agrees that such income and employment tax withholding
may be deducted from other Compensation of the Participant.

    


    SECTION
5.  WITHDRAWAL FROM THE PLAN.

    


    (a)  Withdrawal.  A
Participant may elect to withdraw from the Plan by filing the prescribed form
with the Company at the designated location, or with the designated person, at
any time before the last day of an Accumulation Period.  As soon as
reasonably practicable thereafter, payroll deductions shall cease and the entire
amount credited to the Participant’s Plan Account shall be refunded to him or
her in cash, without interest.  No partial withdrawals shall be
permitted.

    


    (b)  Re-Enrollment After
Withdrawal.  A former Participant who has withdrawn from the
Plan shall not be a Participant until he or she re-enrolls in the Plan under
Section 3(c).  Re-enrollment may be effective only at the
commencement of an Offering Period.

    


    SECTION
6.  CHANGE IN EMPLOYMENT STATUS.

    


    (a)  Termination of
Employment.  Termination of employment as an Eligible Employee
for any reason, including death, shall be treated as an automatic withdrawal
from the Plan under Section 5(a).  A transfer from one
Participating Company to another shall not be treated as a termination of
employment.

    


    (b)  Change in Employment
Status.  If a Participant’s customary employment drops
below five months per calendar year or less than 20 hours per week, such change
in employment status shall be treated as an automatic withdrawal from the Plan
under Section 5(a).

    


    (c)  Leave of
Absence.  For purposes of the Plan, employment shall not be
deemed to terminate when the Participant goes on a military leave, a sick leave
or another bona
fide leave of absence, if the leave was approved by the Participating
Company in writing.  Employment, however, shall be deemed to terminate
90 days after the Participant goes on a leave, unless a contract or statute
guarantees his or her right to return to work.  Employment shall be
deemed to terminate in any event when the approved leave ends, unless the
Participant immediately returns to work.

    


    (d)  Death.  In the event
of the Participant’s death, the amount credited to his or her Plan Account shall
be paid to a beneficiary designated by him or her for this purpose on the
prescribed form or, if none, to the Participant’s estate.  Such form
shall be valid only if it was filed with the Company at the designated location,
or with the designated person, before the Participant’s death.

    


    
      
        
        

      

      
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    SECTION
7.  PLAN ACCOUNTS AND PURCHASE OF SHARES.

    


    (a)  Plan Accounts.  The
Company shall maintain a Plan Account on its books in the name of each
Participant.  Whenever an amount is deducted from the Participant’s
Compensation under the Plan, such amount shall be credited to the Participant’s
Plan Account.  Amounts credited to Plan Accounts shall not be trust
funds and may be commingled with the Participating Company’s general assets and
used for or applied to any corporate purpose.  No interest shall
accrue on the amounts deducted from a Participant’s Compensation or credited to
Plan Accounts.

    


    (b)  Purchase Price.  The
Purchase Price for each share of Stock purchased at the close of an Accumulation
Period shall be the lower of:

    


    (i)           85%
of the Fair Market Value of such share on the first trading day in such
Accumulation Period; or

    


    (ii)           85%
of the Fair Market Value of such share on the last trading day in such
Accumulation Period.

    


    (c)  Number of Shares
Purchased.  As of the last day of each Accumulation Period,
each Participant shall be deemed to have elected to purchase the number of
shares of Stock calculated in accordance with this Subsection (c), unless
the Participant has previously elected to withdraw from the Plan in accordance
with Section 5(a).  The amount then in the Participant’s Plan
Account shall be divided by the Purchase Price, and the number of shares that
results shall be purchased from the Company with the funds in the Participant’s
Plan Account.  The foregoing notwithstanding, no Participant shall
purchase more than 5,000 shares of Stock with respect to any Offering Period nor
the amounts of Stock set forth in Sections 8(b) and 13(a).  The
Committee may determine with respect to all Participants that any fractional
share, as calculated under this Subsection (c), shall be (i) rounded down
to the next lower whole share or (ii) credited as a fractional
share. In the event any fractional share is rounded down to the next lower
whole share, the amount of the Participant’s Plan Account that is not sufficient
to purchase a whole share shall be retained in the Plan Account for the next
Accumulation Period unless the Participant has previously elected to withdraw
from the Plan in accordance with Section 5(a).

    


    (d)  Available Shares
Insufficient.  In the event that the aggregate number of shares
that all Participants elect to purchase during an Accumulation Period exceeds
the maximum number of shares remaining available for issuance under
Section 13(a), then the number of shares to which each Participant is
entitled shall be determined by multiplying the number of shares available for
issuance by a fraction, the numerator of which is the number of shares that such
Participant has elected to purchase and the denominator of which is the number
of shares that all Participants have elected to purchase.

    


    (e)  Issuance of
Stock.  A Participant in the Plan initially will hold his or
her shares in book entry form through an agent designated by the
Committee.  As soon as reasonably practicable after the close of the
applicable Accumulation Period, the Company shall deliver the purchased shares
to the agent designated by the Committee to hold shares for
Participants. The Committee may establish a Designating Agent Holding
Period to permit the tracking of disqualified dispositions of purchased
shares.  A Participant may, after the expiration of the Designated
Agent Holding Period, request that the agent deliver to him or her a certificate
for the shares held for his or her account.

    


    (f)  Unused Cash
Balances.  Except as provided in Section 7(c), an amount
remaining in the Participant’s Plan Account at the end of an Accumulation Period
shall be refunded to the Participant in cash, without interest.

    


    (g)  Stockholder
Approval.  Any other provision of the Plan notwithstanding, no
shares of Stock shall be purchased under the Plan unless and until the Company’s
stockholders have approved the adoption of the Plan.

    


    SECTION
8.  LIMITATIONS ON STOCK OWNERSHIP.

    


    (a)  Five Percent
Limit.  Any other provision of the Plan notwithstanding, no
Participant shall be 

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

      granted a
right to purchase Stock under the Plan if such Participant, immediately after
his or her election to purchase such Stock, would own stock possessing more than
5% of the total combined voting power or value of all classes of stock of the
Company or any parent or Subsidiary of the Company.  For purposes of
this Subsection (a), the following rules shall apply:

    

    


    (i)           Ownership
of stock shall be determined after applying the attribution rules of
section 424(d) of the Code;

    


    (ii)           Each
Participant shall be deemed to own any stock that he or she has a right or
option to purchase under this or any other plan; and

    


    (iii)           Each
Participant shall be deemed to have the right to purchase 5,000 shares of Stock
under this Plan with respect to each Offering Period.

    


    (b)  Dollar Limit.  Any
other provision of the Plan notwithstanding, no Participant shall purchase Stock
with a Fair Market Value in excess of $25,000 during any calendar year (under
this Plan and all other employee stock purchase plans of the Company or any
parent or Subsidiary of the Company). For purposes of this
Subsection (b), the Fair Market Value of Stock shall be determined in each
case as of the beginning of the Offering Period in which such Stock is
purchased.  Employee stock purchase plans not described in
section 423 of the Code shall be disregarded.  If a Participant
is precluded by this Subsection (b) from purchasing additional Stock under
the Plan, then his or her employee contributions shall automatically be
discontinued and shall resume at the beginning of the earliest Accumulation
Period ending in the next calendar year (if he or she then is an Eligible
Employee).  The limitations set forth in this Subsection are in
addition to any other limitation the Committee may establish from time to
time.

    


    SECTION
9.  RIGHTS NOT TRANSFERABLE.

    


    The
rights of any Participant under the Plan, or any Participant’s interest in any
Stock or moneys to which he or she may be entitled under the Plan, shall not be
transferable by voluntary or involuntary assignment or by operation of law, or
in any other manner other than by beneficiary designation or the laws of descent
and distribution.  If a Participant in any manner attempts to
transfer, assign or otherwise encumber his or her rights or interest under the
Plan, other than by beneficiary designation or the laws of descent and
distribution, then such act shall be treated as an election by the Participant
to withdraw from the Plan under Section 5(a).

    


    SECTION
10.  NO RIGHTS AS AN EMPLOYEE.

    


    Nothing
in the Plan or in any right granted under the Plan shall confer upon the
Participant any right to continue in the employ of a Participating Company for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Participating Companies or of the Participant, which
rights are hereby expressly reserved by each, to terminate his or her employment
at any time and for any reason, with or without cause.

    


    SECTION
11.  NO RIGHTS AS A STOCKHOLDER.

    


    A
Participant shall have no rights as a stockholder with respect to any shares of
Stock that he or she may have a right to purchase under the Plan until such
shares have been purchased on the last day of the applicable Accumulation
Period and are delivered to the agent designated by the
Committee.

    


    SECTION
12.  SECURITIES LAW REQUIREMENTS.

    


    Shares of
Stock shall not be issued under the Plan unless a registration statement under
the Act with respect to such shares shall be effective and the issuance and
delivery of such shares otherwise comply with (or are exempt from) all
applicable requirements of law, including without limitation the Act, the rules
and regulations promulgated thereunder, state securities laws and regulations,
and the regulations of any stock exchange or other securities market on which
the Company’s securities may then be traded.

    



    
      
         


      

      
        4

        
          

        

      

      
         


      

    

     

    SECTION
13.  STOCK OFFERED UNDER THE PLAN.

    


    (a)  Authorized
Shares.  The number of shares of Stock available for purchase
under the Plan shall be 1,000,000 (subject to adjustment pursuant to this
Section 13).  Stock subject to the Plan may be shares now or
hereafter authorized but unissued, treasury shares, or both.

    


    (b)  Anti-Dilution
Adjustments.  Subject to any required action by the
stockholders of the Company and the 5,000-share limitation described in Section
7(c), the aggregate number of shares of Stock offered under the Plan and
the price of shares that any Participant has elected to purchase shall be
adjusted proportionately by the Committee for any increase or decrease in the
number of outstanding shares of Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification, or any other
increase or decrease in the number of shares of Stock effected without receipt
or payment of consideration by the Company.

    


    (c)  Reorganizations.  Any
other provision of the Plan notwithstanding, immediately prior to the effective
time of a Corporate Reorganization, the Offering Period and Accumulation Period
then in progress shall terminate and shares shall be purchased pursuant to
Section 7, unless the Plan is continued or assumed by the surviving
corporation or its parent corporation.  The Plan shall in no event be
construed to restrict in any way the Company’s right to undertake a dissolution,
liquidation, merger, consolidation or other reorganization.

    


    SECTION
14.  AMENDMENT, SUSPENSION OR TERMINATION.

    


    (a)  Amendment.  The
Board may at any time and without notice amend the Plan in any respect;
provided, however, that no amendment shall be made without the approval of the
stockholders of Company to increase the aggregate number of shares of Stock
which may be issued under the Plan (other than as provided in Section 13)
or for which stockholder approval is required under applicable tax, securities
or other laws.

    


    (b)  Suspension or
Termination.  The Plan and all rights of Participants under any
offering hereunder may be terminated or suspended at any time and without notice
at the discretion of the Board. Upon any suspension or termination of the
Plan, all amounts in Plan Accounts shall in the sole discretion of the Committee
be either (i) refunded to Participants in total or (ii) refunded to Participants
to the extent not used to purchase Stock.  Such suspension or
termination may be made without the approval of the stockholders of the Company
or the consent of any Participant.

    


    SECTION
15.  REPORTS AND NOTICES.

    


    (a)  Statements.  Statements
of account shall be provided to Participants at least annually, which statements
shall set forth the amounts deducted from a Participant’s Compensation, the
Purchase Price for Stock purchased under the Plan on the last day of each
Accumulation Period, the number of shares of Stock purchased under the Plan on
the last day of each Accumulation Period and such other information as the
Committee may deem appropriate.

    


    (b)  Notices.  All
notices or other communications by an Eligible Employee or Participant to a
Participating Company under or in connection with the Plan shall be deemed given
when received by the Participating Company at the location, or by the person,
designated by the Participating Company.

    


    SECTION
16.  TERM OF PLAN.

    


    The Plan
shall continue in effect for a term of ten (10) years following the date of
adoption by the Board, unless sooner terminated pursuant to Section
14.

    


    SECTION
17.  DEFINITIONS.

    


    (a)  “Act” means the Securities Act
of 1933, as amended.

    


    (b)  “Accumulation Period” means the period during
which contributions may be made by Participants toward the purchase of Stock
under the Plan, as determined pursuant to Section 3(b).

    


    
      
        
        

      

      
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    (c)  “Board” means the Board of Directors
of the Company, as constituted from time to time.

    


    (d)  “Code” means the Internal Revenue
Code of 1986, as amended.

    


    (e)  “Committee” means the Board or, to the
extent permitted by law, such committee consisting exclusively of one or more
officers or directors of the Company as may be appointed by the Board from time
to time.  Nothing herein shall be construed as obligating the Board to
delegate authority under the Plan, and the Board may at any time rescind the
authority delegated to a committee appointed hereunder or appoint a new
committee.

    


    (f)  “Company” means Energy Composites
Corporation, a Nevada corporation.

    


    (g)  “Compensation” means (i) the total
compensation paid in cash to a Participant by a Participating Company, including
salaries, wages, bonuses, incentive compensation, commissions, overtime pay and
shift premiums, plus (ii) any pre-tax contributions made by the Participant
under section 401(k) or 125 of the Code.  “Compensation” shall exclude
all non-cash items, moving or relocation allowances, cost-of-living equalization
payments, car allowances, tuition reimbursements, imputed income attributable to
cars or life insurance, severance pay, fringe benefits, contributions or
benefits received under employee benefit plans, income attributable to the
exercise of stock options, and similar items.  The Committee shall
determine whether a particular item is included in Compensation.

    


    (h)  “Corporate Reorganization” means:

    


    
      	
               
      

            	
              (i)

            	
              The
      consummation of a merger or consolidation of the Company with or into
      another entity or any other corporate reorganization (other than one in
      which the Company is the surviving entity);
or

            


    

    


    
      	
               
      

            	
              (ii)

            	
              The
      sale, transfer or other disposition of all or substantially all of the
      Company’s assets or the complete liquidation or dissolution of the
      Company.

            


    

    


    (i)  “Designating Agent Holding
Period” means a reasonable period of time that purchased shares of
Stock must be retained by an agent designated by the Committee to hold shares of
Stock in book entry form on behalf of Participants in order to permit the
tracking of disqualified dispositions of Stock.

    


    (j)  “Eligible Employee” means any employee of a
Participating Company who meets both of the following requirements:

    


    
      	
               
      

            	
              (i)

            	
              His
      or her customary employment is for more than five months per calendar year
      and for more than 20 hours per week;
  and

            


    

    


    
      	
               
      

            	
              (ii)

            	
              He
      or she has been an employee of a Participating Company for not less than
      three consecutive months.

            


    

    


    The
foregoing notwithstanding, an individual shall not be considered an Eligible
Employee if his or her participation in the Plan is prohibited by the law of any
country which has jurisdiction over him or her or if compliance with the laws of
the foreign jurisdiction would cause the Plan to violate the requirement of
section 423 of the Code.

    


    (k)  “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

    


    (l)  “Fair Market Value” means the market price of
Stock, determined by the Committee as follows:

    


    
      	
               
      

            	
              (i)

            	
              If
      the Stock was traded on The Nasdaq National Market or the Over-the-Counter
      Bulletin Board on the date in question, then the Fair Market Value shall
      be equal to the last-transaction price quoted for such date by such
      quotation service;

            


    

    


    
      
        	
                 
      

              	
                (ii)

              	
                If
      the Stock was traded on a stock exchange on the date in question, then the
      Fair Market 

              


         

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

        	 	 	Value
      shall be equal to the closing price reported by the applicable composite
      transactions report for such date;
or


      

    

    


    
      	
               
      

            	
              (iii)

            	
              If
      none of the foregoing provisions is applicable, then the Fair Market Value
      shall be determined by the Committee in good faith on such basis as it
      deems appropriate.

            


    

    


    Whenever
possible, the determination of Fair Market Value by the Committee shall be based
on the prices reported in The Wall Street
Journal or as reported directly to the Company by The Nasdaq National
Market, the Over-the-Counter Bulletin Board or a stock exchange.  Such
determination shall be conclusive and binding on all persons.

    


    (m)  “Offering Period” means the period with
respect to which the right to purchase Stock may be granted under the Plan, as
determined pursuant to Section 3(a).

    


    (n)  “Participant” means an Eligible Employee
who elects to participate in the Plan, as provided in
Section 3(c).

    


    (o)  “Participating Company” means (i) the Company
and (ii) each present or future Subsidiary of the Company.

    


    (p)  “Plan” means this Energy Composites
Corporation Employee Stock Purchase Plan, as it may be amended from time to
time.

    


    (q)  “Plan Account” means the account
established for each Participant pursuant to Section 7(a).

    


    (r)  “Purchase Price” means the price at which
Participants may purchase Stock under the Plan, as determined pursuant to
Section 7(b).

    


    (s)  “Stock” means the $0.001 par value
common stock of the Company.

    


    (t)  “Subsidiary” means a “subsidiary
corporation” as defined under Section 424(f) of the Code.

     

     

    7